The Pound to Euro exchange rate (GBP/EUR) has dropped after positive comments were heard from the European Summit in Brussels this week. The exchange rate dropped from a high of 1.2412 GBP/EUR to plunge back down below support at 1.2300 GBP/EUR, further drops are expected this week.

The Euro to Dollar exchange rate (EUR/USD) has continued to rise with some analysts expecting in to reach the 1.3200 EUR/USD level in the near term.

The following comments buoyed the Euro:

"Since the summer, we have made a lot of progress in our efforts to overcome the immediate crisis in the euro zone. The worst is now behind us, but of course much still needs to be done,”

"This agreement is a real milestone in the strengthening of our economic and monetary union. It will help provide more stability, which in itself is a major contribution in our fight for growth and jobs. Our objective for today is to map out our next steps towards a genuine economic and monetary union. We must implement our agenda on competitiveness and on growth."

The EU finance ministers have already agreed to set up a single supervisory mechanism for all of Europe’s banks, this moves the European union closer to a united front similar to the Federal Reserve in the states.

Further developments could still dash hopes that a long term agreement will be made before Christmas but at the moment sentiment is positive and the Euro’s exchange rate has rallied.

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